Blair v Curran

The case of *Blair v Curran* involved a dispute over the distribution of income from a sweep business established by a testator. The testator's will directed his trustees to carry on the business and to accumulate one-tenth of its net profits. This accumulated fund was to be used at the trustees' discretion for the benefit of the business, for aiding individuals, or for supposed charities. The remaining nine-tenths of the profits were to be distributed among named beneficiaries, with provisions for their widows. Previous proceedings in the Supreme Court of New South Wales had declared certain charitable trusts void for uncertainty and had determined that the accumulated funds, if not used for the business, would follow the same destination as the proceeds of the business upon realization. The current proceedings were initiated in the Supreme Court of Tasmania to determine the entitlement to the accumulated profits after twenty-one years from the testator's death, and the entitlement to a specific share of profits previously enjoyed by a deceased beneficiary's widow.

The legal issues before the High Court of Australia included whether the trust for accumulation of one-tenth of the sweep business's net profits was void under the *Accumulation Act* (39 & 40 Geo. III. c. 98) after twenty-one years from the testator's death. The court also had to determine who was entitled to the income released from this accumulation trust, and who was entitled to a one-twentieth share of profits that had been paid to the widow of a deceased beneficiary for her life. Further questions arose regarding the effect of a previous declaration by Street J. in New South Wales, specifically whether it created an issue estoppel or *res judicata* on the interpretation and validity of the accumulation trust and the destination of released income.

The High Court, by majority, held that the trust for accumulation was void as from the expiration of twenty-one years from the testator's death by virtue of the *Accumulation Act*. The court reasoned that the previous declaration by Street J. did not preclude the application of the *Accumulation Act*. The majority found that the "Hobart-property beneficiaries," who were entitled to the testator's Tasmanian real estate and residue of his personal estate (excluding the sweep business), were entitled to the income released from the accumulation trust. This conclusion was based on the principle that the previous declaration by Street J. regarding the destination of proceeds upon realization should be followed as a long-standing decision on the construction of the will, and also on the basis that the decretal order created an estoppel. The court also determined that the Hobart-property beneficiaries were entitled to the one-twentieth share of profits released by the death of the widow, with some judges holding this passed directly as Tasmanian residue and others that it was caught by the accumulation clause.

The High Court affirmed the decision of the Supreme Court of Tasmania, subject to modifications. The trustees were authorized to continue accumulating the one-tenth of net profits and the one-twentieth share of profits, but only while the authority granted by a deed of arrangement remained in force. Upon the revocation of this authority, or upon the expiration of the period permitted by the *Accumulation Act*, the released income was to be distributed to the Hobart-property beneficiaries.